Analyst Update: Merrimack Pharmaceuticals Inc, Valeant Pharmaceuticals Intl Inc, and Barrick Gold Corporation (USA)

Analysts are weighing in on Merrimack Pharmaceuticals Inc (MACK), Valeant Pharmaceuticals Intl Inc (VRX), and Barrick Gold Corporation (USA) (ABX)

Nov 10, 2016 at 3:46 PM
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U.S. stocks are mixed, as the Dow hits record highs as the Nasdaq Composite (COMP) sits lower with tech. Among stocks in focus today are biotechs Merrimack Pharmaceuticals Inc (NASDAQ:MACK) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX), as well as gold stock Barrick Gold Corporation (USA) (NYSE:ABX). Here's a quick roundup of today's brokerage notes on MACK, VRX, and ABX.

  • MACK is trading 7.5% higher at $6.35, after delivering an earnings beat last night, and on reports that the biotech -- which unveiled a major restructuring last month -- may be considering the sale of some of its assets or a licensing deal. Following MACK's earnings report, BTIG reaffirmed its "neutral" rating on the stock. MACK is still down nearly 20% so far in 2016, but is on pace to close above its 200-day moving average, which has contained rebound attempts since July 2015. A few short sellers are likely kicking rocks after these latest developments. Merrimack Pharmaceuticals Inc short interest is up 15.6% over the last two reporting periods, and now accounts for more than one-third of MACK's float. It would take traders nearly three weeks to cover these shorted shares, at MACK's average daily volume. 
  • VRX is climbing, up 5% at $16.90, after reports that bids for VRX's Australian drug unit, iNova Pharmaceuticals, were submitted last month. This chatter comes just one day after VRX said it'd been subpoenaed by the California Department of Insurance for its relationship with now-defunct Philidor, and two days after the shares gapped to a post-earnings six-year low of $13.77Meanwhile, the brokerage crowd has been quick to weigh in, with Rodman & Renshaw cutting VRX to "neutral" from "buy," and obliterating its price target by 71.6% to $23 from $81. Morgan Stanley also slashed its price target, to $25 from $32. Despite Valeant Pharmaceuticals Intl Inc's struggles on and off the charts, option buyers remain optimistic; VRX's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 2.22 sits just 1 percentage point from an annual peak.

  • Gold stock ABX is trading down nearly 8.5% at $15.79, as gold futures drop, and after the company signed an exploration agreement with Carlin Gold. ABX has also generated some mixed analyst attention. While Jefferies raised its price target on ABX to $22, Barclays cut its price target to $21 from $22. Even with today's drop, Barrick Gold Corporation (USA) is still up over 114% so far this year, though the shares have recently run into a ceiling at ABX's formerly supportive 80-day moving average. In the option pits, ABX traders have been more bullish than usual as of late, with the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.48 sits higher than 71% of all other readings from the last 12 months.
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